Application of The Test
Applying the test above, the Grynberg court concluded that the prepayments satisfied the first prong. The prepayments were not mere deposits but irretrievable payments. However, the court found no valid business reason for making the payments in December rather than the following February or March when the payments were actually due. Because taxpayers failed the second prong of the test, the court did not apply the third requirement to the facts of the case. Because the prepayments were not necessary and ordinary business expenses for the year in which they were paid, the prepayments were not deductible.
Read more about this topic: Grynberg V. Commissioner
Famous quotes containing the words application of the, application of, application and/or test:
“The best political economy is the care and culture of men; for, in these crises, all are ruined except such as are proper individuals, capable of thought, and of new choice and the application of their talent to new labor.”
—Ralph Waldo Emerson (1803–1882)
“I conceive that the leading characteristic of the nineteenth century has been the rapid growth of the scientific spirit, the consequent application of scientific methods of investigation to all the problems with which the human mind is occupied, and the correlative rejection of traditional beliefs which have proved their incompetence to bear such investigation.”
—Thomas Henry Huxley (1825–95)
“Most people, no doubt, when they espouse human rights, make their own mental reservations about the proper application of the word “human.””
—Suzanne Lafollette (1893–1983)
“A test of what is real is that it is hard and rough. Joys are found in it, not pleasure. What is pleasant belongs to dreams.”
—Simone Weil (1909–1943)